A BILL to amend and reenact §22-6-1, §22-6-12, §22-6-14 and §22-6-36 of the Code of West Virginia, 1931, as amended; to amend
said code by adding thereto a new article, designated §22-6A-1, §22-6A-2, §22-6A-3, §22-6A-4, §22-6A-5, §22-6A-6, §22-6A-7,
§22-6A-8, §22-6A-9, §22-6A-10, §22-6A-11, §22-6A-12, §22-6A-13, §22-6A-14, §22-6A-15, §22-6A-16 and §22-6A-17; to amend
and reenact §22C-8-2 of said code; and to amend and reenact
§22C-9-2 of said code, all relating generally to oil and gas
and oil and gas wells; defining certain new terms and amending
existing definitions of certain terms; providing the
Department of Environmental Protection, in consultation with
the West Virginia Board of Professional Surveyors, with the
authority to promulgate rules to govern methods of survey and
information to be present on the plats and reports related to
oil and gas permit maps; requiring notice to coal owners and
lessees of record; creating Natural Gas Horizontal Well
Control Act; providing short title; making legislative
findings and declarations of public policy; providing for
application and exemptions of new act and special
considerations for karst formations; defining terms used in
said act; specifying powers and duties of Secretary of
Department of Environmental Protection; incorporating by
reference certain sections of existing code relating to oil
and gas wells; requiring horizontal well permits; requiring
application for permit; specifying content of application and
required attachments; requiring posting of bond and payment of
permit fees; permitting waiver of certain requirements under
specified circumstances and for issuance of emergency permits;
providing for suspension and reinstatement of permits;
providing for appeals of certain actions of Secretary of
Department of Environmental Protection; providing for review
of permit applications and for issuance of permits; specifying
operator performance standards; providing for copies of
permits to be furnished to county assessors; requiring
certificate of approval for large impoundment construction;
requiring application for certificate; specifying content of
application and required attachments and payment of fees;
providing for revocation or suspension of certificates;
requiring hearing before certificate of approval is amended,
suspended or revoked without consent of operator; providing
for administrative appeals; providing exceptions for certain
farm ponds; authorizing Secretary of Department of
Environmental Protection to propose legislative rules for
consideration by Legislature; providing for permit revocation
and bond forfeiture; requiring notice to property owners when
application for well permit is made or application for
certificate of approval of impoundment is filed and providing
property owners with certain rights; requiring promulgation of
certain legislative rules for plugging and abandonment of
horizontal wells; specifying reclamation requirements;
requiring performance bonds; providing presumptions and
rebuttals in water rights civil actions; imposing certain
civil and criminal penalties for certain violations and
offenses; specifying prospective application of act;
preempting local ordinances; and requiring operator to enter
into certain road maintenance agreement with Division of
Highways.

Be it enacted by the Legislature of West Virginia:

That §22-6-1, §22-6-12, §22-6-14 and §22-6-36 of the Code of
West Virginia, 1931, as amended, be amended and reenacted; that
said code be amended by adding thereto a new article, designated
§22-6A-1, §22-6A-2, §22-6A-3, §22-6A-4, §22-6A-5, §22-6A-6, §22-6A-7, §22-6A-8, §22-6A-9, §22-6A-10, §22-6A-11, §22-6A-12, §22-6A-13,
§22-6A-14, §22-6A-15, §22-6A-16 and §22-6A-17; that §22C-8-2 of
said code be amended and reenacted; and that §22C-9-2 of said code
be amended and reenacted, all to read as follows:

CHAPTER 22. ENVIRONMENTAL RESOURCES.

ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS.

§22-6-1. Definitions.

Unless the context in which used clearly requires a different
meaning, as used in this article:

(a) "Casing" means a string or strings of pipe commonly placed
in wells drilled for natural gas or petroleum or both;

(b) "Cement" means hydraulic cement properly mixed with water;

(c) "Chair" means the chair of the West Virginia shallow gas
well review board as provided for in section four, article eight,
chapter twenty-two-c of this code;

(d) "Coal operator" means any person or persons, firm,
partnership, partnership association or corporation that proposes
to or does operate a coal mine;

(e) "Coal seam" and "workable coal bed" are interchangeable
terms and mean any seam of coal twenty inches or more in thickness,
unless a seam of less thickness is being commercially worked, or
can in the judgment of the department foreseeably be commercially
worked and will require protection if wells are drilled through it;

(f) "Director" means the director of the division of
environmental protection as established in article one of this
chapter or such other person to whom the director has delegated
authority or duties pursuant to sections six or eight, article one
of this chapter.;

(g) “Deep well” means any well other than a shallow well or
coalbed methane well, drilled and completed into a formation at or
below the top of the uppermost member of the “Onondaga Group”;

(h) "Expanding cement" means any cement approved by the office
of oil and gas which expands during the hardening process,
including, but not limited to, regular oil field cements with the
proper additives;

(i) "Facility" means any facility utilized in the oil and gas
industry in this state and specifically named or referred to in
this article or in article eight or nine of this chapter, other
than a well or well site;

(j) "Gas" means all natural gas and all other fluid
hydrocarbons not defined as oil in this section;

(k) "Oil" means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoirs;

(l) "Owner" when used with reference to any well, shall
include any person or persons, firm, partnership, partnership
association or corporation that owns, manages, operates, controls
or possesses such well as principal, or as lessee or contractor,
employee or agent of such principal;

(m) "Owner" when used with reference to any coal seam, shall
include any person or persons who own, lease or operate such coal
seam;

(n) "Person" means any natural person, corporation, firm,
partnership, partnership association, venture, receiver, trustee,
executor, administrator, guardian, fiduciary or other
representative of any kind, and includes any government or any
political subdivision or any agency thereof;

(o) "Plat" means a map, drawing or print showing the location
of a well or wells as herein defined;

(p) "Pollutant" shall have the same meaning as provided in
subsection (17), section three, article eleven of this chapter,
chapter twenty-two of this code;

(q) "Review board" means the West Virginia shallow gas well
review board as provided for in section four, article eight,
chapter twenty-two-c of this code;

(r) "Safe mining through of a well" means the mining of coal
in a workable coal bed up to a well which penetrates such workable
coal bed and through such well so that the casing or plug in the
well bore where the well penetrates the workable coal bed is
severed;

(s) “Shallow well” means any gas well, other than a coalbed
methane well, drilled no deeper than one hundred feet below the top
of the “Onondaga Group”:and completed in a formation above the top
of the uppermost member of the “Onondaga Group”: Provided, That in
drilling a shallow well the operator may penetrate into the
“Onondaga Group” to a reasonable depth, not in excess of twenty
feet, in order to allow for logging and completion operations, but
in no event may the “Onondaga Group” formation or any formation
below the “Onondaga Group” be otherwise produced, perforated or
stimulated in any manner;

(t) "Stimulate" means any action taken by a well operator to
increase the inherent productivity of an oil or gas well,
including, but not limited to, fracturing, shooting or acidizing,
but excluding cleaning out, bailing or workover operations;

(u) "Waste" means (i) physical waste, as the term is generally
understood in the oil and gas industry; (ii) the locating,
drilling, equipping, operating or producing of any oil or gas well
in a manner that causes, or tends to cause a substantial reduction
in the quantity of oil or gas ultimately recoverable from a pool
under prudent and proper operations, or that causes or tends to
cause a substantial or unnecessary or excessive surface loss of oil
or gas; or (iii) the drilling of more deep wells than are
reasonably required to recover efficiently and economically the
maximum amount of oil and gas from a pool; (iv) substantially
inefficient, excessive or improper use, or the substantially
unnecessary dissipation of, reservoir energy, it being understood
that nothing in this chapter shall be construed to authorize any
agency of the state to impose mandatory spacing of shallow wells
except for the provisions of section eight, article nine, chapter
twenty-two-c of this code and the provisions of article eight,
chapter twenty-two-c of this code; (v) inefficient storing of oil
or gas: Provided, That storage in accordance with a certificate of
public convenience issued by the federal energy regulatory
commission shall be conclusively presumed to be efficient and (vi)
other underground or surface waste in the production or storage of
oil, gas or condensate, however caused. Waste does not include gas
vented or released from any mine areas as defined in section two,
article one, chapter twenty-two-a of this code, or from adjacent
coal seams which are the subject of a current permit issued under
article two of chapter twenty-two-a of this code: Provided,
however, That nothing in this exclusion is intended to address
ownership of the gas;

(v) "Waters of this state" shall have the same meaning as the
term "waters" as provided in subsection (23), section three,
article eleven, chapter twenty-two of this code.;

(w) "Well" means any shaft or hole sunk, drilled, bored or dug
into the earth or into underground strata for the extraction or
injection or placement of any liquid or gas, or any shaft or hole
sunk or used in conjunction with such extraction or injection or
placement. The term "well" does not include any shaft or hole sunk,
drilled, bored or dug into the earth for the sole purpose of core
drilling or pumping or extracting therefrom potable, fresh or
usable water for household, domestic, industrial, agricultural or
public use;

(x) "Well work" means the drilling, redrilling, deepening,
stimulating, pressuring by injection of any fluid, converting from
one type of well to another, combining or physically changing to
allow the migration of fluid from one formation to another or
plugging or replugging of any well; and

(y) "Well operator" or "operator" means any person or persons,
firm, partnership, partnership association or corporation that
proposes to or does locate, drill, operate or abandon any well as
herein defined.

(a) Before drilling for oil or gas, or before fracturing or
stimulating a well on any tract of land, the well operator shall
have a plat prepared by a licensed landprofessional surveyor or
registered engineer showing the district and county in which the
tract of land is located, the name and acreage of the same, the
names of the owners of adjacent tracts, the proposed or actual
location of the well determined by survey, the courses and
distances of such location from two permanent points or landmarks
on said tract and the number to be given the well. In the event
the tract of land on which the said well proposed to be drilled or
fractured is located is known to be underlain by one or more coal
seams, copies of the plat shall be forwarded by registered or
certified mail to each and every coal operator operating said coal
seams beneath said tract of land, who has mapped the same and filed
such maps with the Office of Miners' Health, Safety and Training in
accordance with chapter twenty-two-a of this code and the coal seam
owner of record and lessee of record, if any, if said owner or
lessee has recorded the declaration provided in section thirty-six
of this article, and if said owner or lessee is not yet operating
said coal seams beneath said tract of land. With each of suchthe
plats there shall be enclosed a notice (form for which shall be
furnished on request by the secretary) addressed to the secretary
and to each such coal operator, owner and lessee, if any, at their
respective addresses, informing them that suchthe plat and notice
are being mailed to them respectively by registered or certified
mail, pursuant to the requirements of this article: Provided, That
the Department of Environmental Protection, with advice from the
West Virginia Board of Professional Surveyors, may promulgate rules
to govern methods of survey and information to be present on the
plats and reports related to oil and gas permit maps including but
not limited to requiring a north arrow, tax map and parcel numbers
for surface tracts, mineral boundary lines, mineral owner name and
title reference, surface owner name and title reference, named
waterways, state highway and county numbered route numbers, and the
plat shall be drawn to a scale large enough for the information to
be legible.

(b) If no objections are made, or are found by the secretary,
to suchthe proposed location or proposed fracturing within fifteen
days from receipt of such plat and notice by the secretary, the
same shall be filed and become a permanent record of suchthe
location or fracturing subject to inspection at any time by any
interested person, and the secretary may forthwithimmediately
issue to the well operator a permit reciting the filing of suchthe
plat, that no objections have been made by the coal operators,
owners and lessees, if any, or found thereto by the secretary, and
authorizing the well operator to drill at suchthe location, or to
fracture the well. Unless the secretary has objections to suchthe
proposed location or proposed fracturing or stimulating, suchthe
permit may be issued prior tobefore the expiration of suchthe
fifteen-day period upon the obtaining by the well operator of the
consent in writing of the coal operator or operators, owners and
lessees, if any, to whom copies of the plat and notice shall have
been mailed as herein required, and upon presentation of suchthe
written consent to the secretary. The notice above provided for
may be given to the coal operator by delivering or mailing it by
registered or certified mail as above to any agent or
superintendent in actual charge of mines.

(c) A permit to drill, or to fracture or stimulate an oil or
gas well, shallmay not be issued unless the application therefor
is accompanied by a bond as provided in section twenty-six of this
article.

§22-6-14. Plats prerequisite to introducing liquids or waste into
wells; preparation and contents; notice and information
furnished to coal operators, owners or lessees and director;
issuance of permits; performance bonds or security in lieu
thereof.

(a) Before drilling a well for the introduction of liquids for
the purposes provided for in section twenty-five of this article or
for the introduction of liquids for the disposal of pollutants or
the effluent therefrom on any tract of land, or before converting
an existing well for such purposes, the well operator shall have a
plat prepared by a registered engineer or licensed landprofessional surveyor showing the district and county in which the
tract of land is located, the name and acreage of the same, the
names of the owners of all adjacent tracts, the proposed or actual
location of the well or wells determined by a survey, the courses
and distances of suchthe location from two permanent points of
land marked on said tract and the number to be given to the well,
and shall forward by registered or certified mail the original and
one copy of the plat to the director. In addition, the well
operator shall provide the following information on the plat or by
way of attachment thereto to the director in the manner and form
prescribed by the director's rules: (1) The location of all wells,
abandoned or otherwise located within the area to be affected; (2)
where available, the casing records of all suchthose wells; (3)
where available, the drilling log of all suchthose wells; (4) the
maximum pressure to be introduced; (5) the geological formation
into which suchthat liquid or pressure is to be introduced; (6) a
general description of the liquids to be introduced; and (7) the
location of all water-bearing horizons above and below the
geological formation into which suchthat pressure, liquid or waste
is to be introduced; (8) such other information as the director
requires by rule: may requireProvided, That the Department of
Environmental Protection, with advice from the West Virginia Board
of Professional Surveyors may promulgate rules to govern methods of
survey and information to be present on the plats and reports
related to oil and gas permit maps including but not limited to
requiring a north arrow, tax map and parcel numbers for surface
tracts, mineral boundary lines, mineral owner name and title
reference, surface owner name and title reference, named waterways,
state highway and county numbered route numbers, and the plat shall
be drawn to a scale large enough for the information to be legible.

(b) In the eventIf the tract of land on which saidthe well
proposed to be drilled or converted for the purposes provided for
in this section is located is known to be underlaid with coal
seams, copies of the plat and all information required by this
section shall be forwarded by the operator by registered or
certified mail to each and every coal operator operating coal seams
beneath saidthe tract of land, who has mapped the same and filed
such maps with the Office of Miners' Health, Safety and Training in
accordance with chapter twenty-two-a of this code, and the coal
seam owner of record and lessee of record, if any, if saidthe
owner or lessee has recorded the declaration provided in section
thirty-six of this article, and if saidthe owner or lessee is not
yet operating saidthose seams beneath saidthe tract of land.
With each of suchthe plats, there shall be enclosed a notice (form
for which shall be furnished on request by the director) addressed
to the director and to each such coal operator, owner or lessee, if
any, at their respective addresses, informing them that suchthe
plat and notice are being mailed to them, respectively, by
registered or certified mail, pursuant to the requirements of this
section.

(c) If no objections are made by any such coal operator, owner
or lessee, or the director, suchthe proposed drilling or
converting of the well or wells for the purposes provided for in
this section within thirty days from the receipt of suchthe plat
and notice by the director, the same shall be filed and become a
permanent record of suchthe location or well, subject to
inspection at any time by any interested person, and the director
may after public notice and opportunity to comment, issue sucha
permit authorizing the well operator to drill at suchthe location
or convert suchthe existing well or wells for the purposes
provided for in this section. The notice above provided for may be
given to the coal operator by delivering or mailing it by
registered or certified mail as above to any agent or
superintendent in actual charge of the mines.

(d) A permit to drill a well or wells or convert an existing
well or wells for the purposes provided for in this section shallmay not be issued until all of the bonding provisions required by
the provisions of section twelve of this article have been fully
complied with and all suchthose bonding provisions shall apply to
all wells drilled or converted for the purposes provided for in
this section as if suchthose wells had been drilled for the
purposes provided for in section twelve of this article, except
that suchthe bonds shall be conditioned upon full compliance with
all laws and rules relating to the drilling of a well or the
converting of an existing well for the purposes provided for in
said section twenty-five of this article, or introducing of liquids
for the disposal of pollutants including the redrilling, deepening,
casing, plugging or abandonment of all such wells.

§22-6-36. Declaration of oil and gas notice by owners and lessees
of coal seams.

(a) For purposes of notification under this article, any owner
or lessee of coal seams shallmay file a declaration of the owner's
or lessee's interest in suchthe coal seams with the clerk of the
county commission in the county where suchthe coal seams are
located. SaidThe clerk shall file and index suchthe declaration
in accordance with section two, article one, chapter thirty-nine of
this code, and shall index the name of the owner or lessee of suchthe coal seams in the grantor index of the record maintained for
the indexing of leases. If the declaration of owner’s or lessee’s
interest is not filed, then notification pursuant to this article
shall be made to the owners or lessees of coal seams of record.

(b) The declaration, if filed,shall entitles suchthe owner
or lessee to the notices provided in sections twelve, thirteen,
fourteen, and twenty-three of this article: Provided, That the
declaring owner shall be the record owner of the coal seam, and the
declaring lessee shall be the record lessee with the owner's or
lessee's source or sources of title recorded prior to recording
suchthe lessee's declaration.

(c) The declaration, if filed, shall be acknowledged by suchthe owner or lessee and, in the case of a lessee, may be a part of
the coal lease under which the lessee claims. SuchThe declaration
may be in the following language:

"DECLARATION OF OIL AND GAS NOTICE"

"The undersigned hereby declares:

(1) The undersigned is the ('owner' or 'lessee') of one or
more coal seams or workable coal beds as those terms are defined in
section one of this article.

(2) The coal seam(s) or workable coal bed(s) owned or leased
partly or wholly by the undersigned lie(s) under the surface of
lands described as follows:

(Here insert a description legally adequate for a deed,
whether by metes and bounds or other locational description, or by
title references such as a book and page legally sufficient to
stand in lieu of a locational description.)

(3) The undersigned desires to be given all notices of oil and
gas operations provided by sections twelve, thirteen, fourteen, and
twenty-three of this article, addressed as follows:

(Here insert the name and mailing address of the undersigned
owner or lessee.)

_______________________________

(Signature)

(Here insert an acknowledgment legally adequate for a deed)."

The benefits of the foregoing declaration shall be personal to
the declaring owner or lessee, and not transferable or assignable
in any way.

ARTICLE 6A. NATURAL GAS HORIZONTAL WELL CONTROL ACT.

§22-6A-1. Short title.

This article shall be known and cited as the “Horizontal Well
Act”.

§22-6A-2. Legislative findings; declaration of public policy.

(a) The Legislature finds that:

(1) The advent and advancement of new and existing
technologies and drilling practices have created the opportunity
for the efficient development of natural gas contained in
underground shales and other geologic formations;

(2) These practices have resulted in a new type and scale of
natural gas development that utilizes horizontal drilling
techniques, allows the development of multiple wells from a single
surface location, and may involve fracturing processes that use and
produce large amounts of water;

(3) In some instances these practices may require the
construction of large impoundments for the storage of water or
wastewater;

(4) Existing laws and regulations developed for conventional
oil and gas operations are inadequate to address the potential
environmental impacts from these new technologies and practices;
and

(5) Allowing the responsible development of our state’s
natural gas resources will enhance the economy of our state and the
quality of life for our citizens while assuring the long term
protection of the environment.

(b) The Legislature declares that the establishment of a new
regulatory scheme to address new and advanced natural gas
development technologies and drilling practices is in the public
interest and should be done in a manner that protects the
environment and our economy for current and future generations.

(c) The Legislature declares that in view of the urgent need
for prompt decision of matters submitted to the secretary under
this article, all actions which the secretary, or oil and gas
inspectors are required to take under this article, shall be taken
as rapidly as practicable, consistent with adequate consideration
of the issues involved.

§22-6A-3. Applicability; exceptions; karst formations.

(a) Notwithstanding any other provision of this code to the
contrary, the provisions of this article shall apply to any natural
gas well that is a horizontal well as defined in section four of
this article: Provided, That this article shall not apply to or
affect any well work permitted for a horizontal well or orders
issued regarding horizontal wells prior to the effective date of
this article.

(b) Because karst geology may require precautions not commonly
needed in other parts of the state when exploring for or producing
oil and natural gas, the secretary shall review the department’s
regulatory program to determine whether the rules applicable to oil
and gas wells need to be revised to address drilling in areas of
karst geology. If so, the secretary may propose legislative rules,
including emergency rules if it is deemed necessary, in accordance
with the provisions of the administrative procedures act in chapter
twenty-nine-a of this code. The secretary may require such
additional safeguards as may be necessary to protect this
geological formation. Special safeguards may include changing
proposed well locations to avoid damage to water resources, special
casing programs and additional or special review of drilling
procedures. Nothing in this section shall be construed to allow
the department to prevent drilling in karst geology.

22-6A-4. Definitions.

(a) All definitions set forth in article six of this chapter
apply when those defined terms are used in this article, unless the
context in which the term is used clearly requires a different
meaning.

(b) Unless the context in which used clearly requires a
different meaning, as used in this article:

(1) “Best management practices” means schedules of activities,
prohibitions of practices, maintenance procedures, and other
management practices to prevent or reduce pollution of waters of
this State. For purposes of this article, best management practices
also includes those practices and procedures set out in the Erosion
and Sediment Control Manual of the Office of Oil and Gas;

(2) “Department” means the department of environmental
protection;

(3) ”Horizontal drilling” means a method of drilling a well
for the production of natural gas that is intended to maximize the
length of wellbore that is exposed to the formation and in which
the wellbore is initially vertical but eventually is curved to
become horizontal, or nearly horizontal, to parallel a particular
geologic formation;

(4) “Horizontal well” means any well, other than a coalbed
methane well, drilled using a horizontal drilling method;

(5) “Flowback Recycle Impoundment” means an impoundment used
for the retention of flowback and freshwater and into which no
other wastes of any kind are placed;

(6) “Freshwater Impoundment” means an impoundment used for the
retention of fresh water and into which no wastes of any kind are
placed;

(7) “Impoundment” means a man-made excavation or diked area
for the retention of fluids;

(8) “Pit” means a man-made excavation or diked area that
contains or is intended to contain an accumulation of process waste
fluids, drill cuttings or any other liquid substance generated in
the development of a horizontal well and which could impact surface
or groundwater.; and

(9) “Secretary” means the Cabinet Secretary of the Department
of Environmental Protection as established in article one of this
chapter or such other person to whom the secretary has delegated
authority or duties pursuant to sections six or eight, article one
of this chapter.

§22-6A-5. Application of article six of this chapter to horizontal
wells subject to this article.

To the extent that horizontal wells governed by this article
are similar to conventional oil and gas wells regulated under
article six of this chapter, the following sections of article six
of this chapter are hereby incorporated by reference in this
article:

(a) The provisions of section three, article six of this
chapter relating to the findings and orders of inspectors
concerning violations, the determination of reasonable time for
abatement, extensions of time for abatement, special inspections,
notice of findings and orders.

(b) The provisions of section four, article six of this
chapter providing for the review of findings and orders by the
secretary, special inspections, and applications for annulment or
revision of orders by the secretary.

(c) The provisions of section five, article six of this
chapter relating to the requirements for findings, orders and
notices, notice to the operator of findings and orders, and
judicial review of final orders of the secretary.

(d) The provisions of section seven, article six of this
chapter relating to the issuance of water pollution control
permits, the powers and duties of the secretary related thereto,
and penalties for violations of the same.

(e) The provisions of section eight, article six of this
chapter relating to the prohibition of permits for wells on flat
well royalty leases and requirements for permits.

(f) The provisions of section ten, article six of this chapter
pertaining to the procedures for filing comments relating to
proposed well work and the applicant’s obligation to certify
compliance with applicable notice requirements, with the following
exceptions:

(1) Under subsection (a), section ten, article six of this
chapter the persons described in subsections (a) and (b), section
ten of this article shall be entitled to file comments.

(2) Under subsection (a), section ten, article six of this
chapter the applicable time period for filing comments shall be
thirty days from the filing of an application with the secretary.

(g) The provisions of section twelve, article six of this
chapter pertaining to plats prerequisite to drilling or fracturing
wells, the preparation and contents thereof, notice furnished to
coal operators, owners or lessees, the issuance of permits, and
required performance bonds, with the following exceptions:

(1) Under subsection (a), section twelve, article six of this
chapter the plat also shall identify all surface tract boundaries
within the scope of the plat.

(2) Under subsection (b), section twelve, article six of this
chapter any reference to a time period shall be thirty days in lieu
of fifteen days.

(h) The provisions of section thirteen, article six of this
chapter providing for notice of the operator’s intention to
fracture wells, with the exception that under subsection (c) of
section thirteen, article six of this chapter the applicable time
periods shall be thirty days in lieu of fifteen days.

(i) The provisions of section fifteen, article six of this
chapter pertaining to objections to proposed deep well drilling
sites above seam or seams of coal, with the exception that the
applicable time for filing objections shall be within thirty days
of receipt by the secretary of the required plat and/or notice in
lieu of fifteen days.

(j) The provisions of section seventeen, article six of this
chapter pertaining to drilling of shallow gas wells, notice to be
provided to the chair of the review board, orders issued by the
review board, and permits issued for such drilling, with the
exception that the applicable time for filing objections shall be
thirty days from the date of receipt by the secretary of the
required plat and notice in lieu of fifteen days.

(k) The provisions of section eighteen, article six of this
chapter providing for protective devices for when a well penetrates
one or more workable coal beds and when gas is found beneath or
between workable coal beds.

(l) The provisions of section nineteen, article six of this
chapter providing for protective devices during the life of the
well and for dry or abandoned wells.

(m) The provisions of section twenty, article six of this
chapter providing for protective devices when a well is drilled
through the horizon of a coalbed from which the coal has been
removed.

(n) The provisions of section twenty-one, article six of this
chapter requiring the installation of fresh water casings.

(o) The provisions of section twenty-two, article six of this
chapter relating to the filing of a well completion report and the
contents thereof, confidentiality and permitted use, and the
secretary’s authority to promulgate rules.

(p) The provisions of section twenty-seven, article six of
this chapter regarding a cause of action for damages caused by an
explosion.

(q) The provisions of section twenty-eight, article six of
this chapter relating to supervision by the secretary over drilling
and reclamation operations, the filing of complaints, hearings on
the same, and appeals.

(r) The provisions of section twenty-nine, article six of this
chapter providing for the Operating Permit and Processing Fund, the
oil and gas reclamation fund, and associated fees, with the
exception that in the opening paragraph of subsection (a), section
twenty-nine, article six of this chapter the fees to be credited to
the Oil and Gas Operating Permit and Processing Fund shall be the
permit fees collected pursuant to subsection (f), section seven of
this article.

(s) The provisions of section thirty-one, article six of this
chapter providing for preventing waste of gas, plans of operation
for wasting gas in the process of producing oil and the secretary’s
rejection thereof.

(t) The provisions of section thirty-two, article six of this
chapter pertaining to the right of an adjacent owner or operator to
prevent waste of gas and the recovery of costs.

(u) The provisions of section thirty-three, article six of
this chapter relating to circuit court actions to restrain waste.

(v) The provisions of section thirty-six, article six of this
chapter providing for the declaration of oil and gas notice by
owners and lessees of coal seams and setting out the form of such
notice, with the exception that the owner or lessee of coal seams
shall be entitled only to the notices provided in sections twelve
and thirteen, of article six of this chapter.

(w) The provisions of section thirty-nine, article six of this
chapter relating to petitions for injunctive relief.

(x) The provisions of section forty, article six of this
chapter relating to appeals from orders issuing or refusing to
issue a permit to drill or fracture, and the procedure therefore.

Notwithstanding any other provision of this code to the
contrary, no provision of article six of this chapter shall apply
to horizontal wells subject to this article except as expressly
incorporated by reference in this article.

§22-6A-6. Secretary of Department of Environmental Protection;
powers and duties.

The secretary is vested with jurisdiction over all aspects of
this article, including, but not limited to, the following powers
and duties:

(1) To control and exercise regulatory authority over all gas
operations regulated by this article;

(2) To utilize any oil and gas inspectors or other employees
of the Office of Oil and Gas in the enforcement of the provisions
of this article;

(3) To propose any necessary legislative rules, in accordance
with the provisions of chapter twenty-nine-a of this code to
implement the provisions of this article; and

(4) To make investigations and inspections necessary to ensure
compliance with the provisions of this article.

(5) Except for the duties and obligations conferred by statute
upon the shallow gas well review board pursuant to article eight,
chapter twenty-two-c of this code, the coalbed methane review board
pursuant to article twenty-one of this chapter, and the oil and gas
conservation commission pursuant to article nine, chapter twenty-two-c of this code, the secretary has sole and exclusive authority
to regulate the permitting, location, spacing drilling, operation
and plugging of oil and gas wells and production operations within
the state.

(a) It is unlawful for any person to commence any well work,
including site preparation work which involves any disturbance of
land, for a horizontal well without first securing from the
secretary a well work permit pursuant to this article.

(b) Every permit application filed under this section shall be
on such form as may be prescribed by the secretary, shall be
verified, and shall contain the following information:

(1) The names and addresses of (i) the well operator, (ii) the
agent required to be designated under subsection (h) of this
section, and (iii) every person whom the applicant must notify
under any section of this article, together with a certification
and evidence that a copy of the application and all other required
documentation has been delivered to all such persons;

(2) The name and address of every coal operator operating coal
seams under the tract of land on which the well is or may be
located, and the coal seam owner of record and lessee of record
required to be given notice by subsection (f), section five of this
article, if any, if said owner or lessee is not yet operating said
coal seams;

(3) The number of the well or such other identification as the
secretary may require;

(4) The well work for which a permit is requested;

(5) The approximate depth to which the well is to be drilled
or deepened, or the actual depth if the well has been drilled;

(6) Each formation in which the well will be completed if
applicable;

(7) A description of any means used to stimulate the well;

(8) If the proposed well work will require casing or tubing to
be set, the entire casing program for the well, including the size
of each string of pipe, the starting point and depth to which each
string is to be set, and the extent to which each such string is to
be cemented;

(9) If the proposed well work is to convert an existing well,
all information required by this section, all formations from which
production is anticipated and any plans to plug any portion of the
well;

(10) If the proposed well work is to plug or replug the well,
all information necessary to demonstrate compliance with the
legislative rules promulgated by the secretary in accordance with
section eleven of this article;

(11) If the proposed well work is to stimulate a horizontal
well, all information necessary to demonstrate compliance with the
requirements of subsection (g), section five of this article;

(12) The erosion and sediment control plan required under
subsection (c) of this section for applications for permits to
drill;

(13) A well site safety plan to address proper safety measures
to be employed for the protection of persons on the site as well as
the general public. The plan shall encompass all aspects of the
operation, including the actual well work for which the permit was
obtained, completion activities, and production activities and
shall provide an emergency point of contact for the well operator.
The well operator shall provide a copy of the well site safety to
the local emergency planning committee established pursuant to
section seven, article five-a, chapter fifteen of this code, for
the emergency planning district in which the well work will occur
at least seven days before commencement of well work or site
preparation work that involves any disturbance of land; and

(14) Any other relevant information which the secretary may
reasonably require.

(c)(1) An erosion and sediment control plan shall accompany
each application for a well work permit under this article. The
plan shall contain methods of stabilization and drainage, including
a map of the project area indicating the amount of acreage
disturbed. The erosion and sediment control plan shall meet the
minimum requirements of the West Virginia Erosion and Sediment
Control Manual as adopted and from time to time amended by the
department. The erosion and sediment control plan shall become part
of the terms and conditions of any well work permit that is issued
pursuant to this article and the provisions of the plan shall be
carried out where applicable in the operation. The erosion and
sediment control plan shall set out the proposed method of
reclamation which shall comply with the requirements of section
twelve of this article.

(2) For horizontal well sites that disturb 5 acres or more of
surface, excluding pipelines, gathering lines, and roads, the
erosion and sediment control plan submitted in accordance with this
section shall be certified by a registered professional engineer.

(d) For well sites that disturb five acres or more of surface,
excluding pipelines, gathering lines, and roads, the operator shall
submit a site construction plan that shall be certified by a
registered professional engineer and contains information that the
secretary may require by rule.

(e) In addition to the other requirements of this section, if
the drilling, fracturing or stimulating of the horizontal well
requires the use of water obtained by withdrawals from waters of
this state in amounts that exceed 210,000 gallons during any month,
the application for a well work permit shall include a water
management plan, which shall include the following information:

(1) The type of water source, such as surface or groundwater,
the county of each source to be used by the operation for water
withdrawals, and the latitude and longitude of each anticipated
withdrawal location;

(2) The anticipated volume of each water withdrawal;

(3) The anticipated months when water withdrawals will be
made;

(4) The planned management and disposition of wastewater from
fracturing, stimulation, and production activities;

(5) A listing of the anticipated additives that may be used in
water used for fracturing or stimulating the well. Upon well
completion, a listing of the additives that were actually used in
the fracturing or stimulating of the well shall be submitted as
part of the completion report required by subsection (n), section
five of this article;

(6) For all surface water withdrawals, a water resources
protection plan that includes the information requested in
subdivisions (1) through (5) of this subsection (e) and includes
documentation of measures that will be taken to allow the State to
manage the quantity of its waters for present and future use and
enjoyment and for the protection of the environment. The plan
shall include the following:

(A) Identification of the current designated and existing
water uses, including any public water intakes within one mile
downstream of the withdrawal location;

(B) For surface waters, a demonstration, using methods
acceptable to the secretary, that sufficient in-stream flow will be
available immediately downstream of the point of withdrawal. A
sufficient in-stream flow is maintained when a pass-by flow that is
protective of the identified use of the stream is preserved
immediately downstream of the point of withdrawal; and

(C) Methods to be used for surface water withdrawal to
minimize adverse impact to aquatic life.

(7) This subsection is intended to be consistent with and does
not supersede, revise, repeal or otherwise modify articles eleven,
twelve or twenty-six of this chapter and does not revise, repeal or
otherwise modify the common law doctrine of riparian rights in West
Virginia law.

(f) An application may propose and a permit may approve two or
more activities defined as well work, however a separate permit
must be obtained for each well drilled.

(g) The application for a permit under this section shall be
accompanied by the applicable bond as required by section thirteen
of this article, the applicable plat required by subsection (f),
section five of this article, and a permit fee of $5,000 for the
initial horizontal well drilled at a location and a permit fee of
$1,000 for each additional well drilled on a single well pad at the
same location.

(h) The well operator named in the application shall designate
the name and address of an agent for the operator who shall be the
attorney-in-fact for the operator and who shall be a resident of
the state of West Virginia upon whom notices, orders or other
communications issued pursuant to this article or article eleven of
chapter twenty-two may be served, and upon whom process may be
served. Every well operator required to designate an agent under
this section shall, within 5 days after the termination of such
designation, notify the secretary of such termination and designate
a new agent.

(i) The well owner or operator shall install the permit number
as issued by the secretary and a contact telephone number for the
operator in a legible and permanent manner to the well upon
completion of any permitted work. The dimensions, specifications,
and manner of installation shall be in accordance with the rules of
the secretary.

(j) The secretary may waive the requirements of this section
and sections eight and ten of this article and subsection (e),
section five of this article in any emergency situation, if the
secretary deems such action necessary. In such case the secretary
may issue an emergency permit which shall be effective for not more
than 30 days, unless reissued by the secretary.

(k) The secretary shall deny the issuance of a permit if the
secretary determines that the applicant has committed a substantial
violation of a previously issued permit for a horizontal well,
including the applicable erosion and sediment control plan
associated with the previously issued permit, or a substantial
violation of one or more of the rules promulgated under this
article, and has failed to abate or seek review of the violation
within the time prescribed by the secretary pursuant to the
provisions of subsections (a) and (b), section five of this article
and the rules promulgated hereunder, which time may not be
unreasonable.

(l) In the event the secretary finds that a substantial
violation has occurred and that the operator has failed to abate or
seek review of the violation in the time prescribed, the secretary
may suspend the permit on which said violation exists, after which
suspension the operator shall forthwith cease all well work being
conducted under the permit. However,the secretary may reinstate
the permit without further notice, at which time the well work may
be continued. The secretary shall make written findings of any such
suspension and may enforce the same in the circuit courts of this
state. The operator may appeal a suspension pursuant to the
provisions of subsection (w), section five of this article. The
secretary shall make a written finding of any such determination.

§22-6A-8. Review of application; issuance of permit in the absence
of objections; performance standards; copy of permits to
county assessor.

(a) The secretary shall review each application for a well
work permit and shall determine whether or not a permit shall be
issued.

(b) No permit shall be issued less than 30 days after the
filing date of the application for any well work except plugging or
replugging; and no permit for plugging or replugging shall be
issued less than 5 days after the filing date of the application
except a permit for plugging or replugging a dry hole: Provided,
That if the applicant certifies that all persons entitled to notice
of the application under the provisions of this article have been
served in person or by certified mail, return receipt requested,
with a copy of the well work application, including the erosion and
sediment control plan, if required, and the plat required by
section seven of this article, and further files written statements
of no objection by all such persons, the secretary may issue the
well work permit at any time.

(c) Prior to the issuance of any permit the director shall
ascertain from the Executive Director of Workforce West Virginia
and the Insurance Commissioner whether the applicant is in
compliance with the provisions of section six-c, article two,
chapter twenty-one-a of this code, and section five, article two,
chapter twenty-three of this code, with regard to any required
subscription to the Unemployment Compensation Fund or to the
Workers' Compensation Fund, the payment of premiums and other
charges to the fund, the timely filing of payroll reports and the
maintenance of adequate deposits. If the applicant is delinquent or
defaulted, or has been terminated by the executive director or the
Insurance Commissioner, the permit may not be issued until the
applicant returns to compliance or is restored by the executive
director or the Insurance Commissioner under a reinstatement
agreement: Provided, That in all inquiries the Executive Director
of Workforce West Virginia and the Insurance Commissioner shall
make response to the Department of Environmental Protection within
fifteen calendar days; otherwise, failure to respond timely is
considered to indicate the applicant is in compliance and the
failure will not be used to preclude issuance of the permit.

(d) The secretary may cause such inspections to be made of the
proposed well work location as necessary to assure adequate review
of the application. The permit shall not be issued, or shall be
conditioned including conditions with respect to the location of
the well and access roads prior to issuance if the director
determines that:

(1) The proposed well work will constitute a hazard to the
safety of persons;

(2) The plan for soil erosion and sediment control is not
adequate or effective;

(3) Damage would occur to publicly owned lands or resources;
or

(4) The proposed well work fails to protect fresh water
sources or supplies.

(e) The director shall promptly review all comments filed. If
after review of the application and all comments received, the
application for a well work permit is approved, and no timely
objection or comment has been filed with the director or made by
the director under the provisions of subsection (h)and (i), section
five of this article, the permit shall be issued, with conditions,
if any. Nothing in this section shall be construed to supersede the
provisions of section seven or subsections (f) through (i), section
five of this article.

(f) Each permit issued by the secretary pursuant to this
article shall require the operator at a minimum to:

(1) Adopt measures consistent with best management practices
in order to control fugitive particulate matter;

(2) Plug all wells in accordance with the requirements of this
article and the rules promulgated pursuant thereto when such wells
become abandoned pursuant to subsection (k), section five of this
article;

(3) With respect to disposal of cuttings at the well site,
stabilize all waste pits, including the use of impervious
materials, if necessary, to assure that any leachate therefrom will
not degrade surface or groundwaters below water quality standards
established pursuant to applicable federal and State law and that
the site is stabilized and revegetated according to the provisions
of this article and the rules promulgated thereunder;

(4) Grade, terrace and plant, seed or sod the area disturbed
that is not required in production of the horizontal well where
necessary to bind the soil and prevent substantial erosion and
sedimentation;

(5) Protect off-site areas from damages that may result from
horizontal drilling operations;

(6) Take action in accordance with industry standards to
minimize fire hazards and other conditions which constitute a
hazard to health and safety of the public;

(7) Protect the quantity and the quality of water in surface
and groundwater systems both during and after drilling operations
and during reclamation by: (A) Withdrawing water from surface
waters of the State by methods deemed appropriate by the secretary,
so as to maintain sufficient in-steam flow immediately downstream
of the withdrawal location. In no case shall an operator withdraw
water from ground or surface waters at volumes beyond which the
waters can sustain; (B) Casing, sealing or otherwise managing wells
to keep returned fluids from entering ground and surface waters;
(C) Conducting oil and gas operations so as to prevent, to the
extent possible using the best management practices, additional
contributions of suspended or dissolved solids to streamflow or
runoff outside the permit area, but in no event shall the
contributions be in excess of requirements set by applicable State
or federal law; and (D) Identify all water supply wells to the
Office of Oil and Gas that are required to be permitted by the
Bureau for Public Health under 64 CSR 19. All drinking water wells
within 2,500 feet of the water supply well shall be flow tested by
the operator upon request of the drinking well owner prior to
operating the water supply well.

(8) The construction of new roads or the improvement or use of
existing roads shall be conducted in accordance with the standards
established pursuant to this article or the rules promulgated
thereunder for such effects which result from oil and gas
operations; and

(9) In addition to the other requirements of this subsection,
an operator proposing to drill any horizontal well requiring the
withdrawal of more than 210,000 gallons in a month shall have the
following requirements added to its permit:

(A) Identification of water withdrawal locations. Within 48
hours prior to the withdrawal of water, the operator shall identify
the location of withdrawal by latitude and longitude and verify
that sufficient flow exists to protect designated uses of the
stream. The operator shall use methods deemed appropriate by the
secretary to determine if sufficient flow is available and must
check flows on a daily basis for the duration of the withdrawal.
Any variation from the methods previously approved by the secretary
for determining if sufficient flow is available must be requested
in writing by the operator.

(B) Signage for water withdrawal locations. All water
withdrawal locations and facilities identified in the water
management plan shall be identified with a sign that identifies
that the location is a water withdrawal point, the name and
telephone number of the operator, and the permit numbers(s) for
which the water withdrawn will be utilized.

(C) Recordkeeping and reporting. For all water used for
hydraulic fracturing of horizontal wells and for flowback water
from hydraulic fracturing activities and produced water from
production activities from horizontal wells, an operator shall
comply with the following record keeping and reporting
requirements:

(i) For production activities, the following information shall
be recorded and retained by the well operator:

(I) The quantity of flowback water from hydraulic fracturing
the well;

(II) The quantity of produced water from the well; and

(III) The method of management or disposal of the flowback and
produced water.

(ii) For transportation activities, the following information
shall be recorded and maintained by the operator:

(I) The quantity of water transported;

(II) The collection and delivery or disposal locations of
water; and

(III) The name of the water hauler.

(iii) The information maintained pursuant to this subdivision
shall be available for inspection by the department along with
other required permits and records and maintained for three years
after the water withdrawal activity.

(iv) This subdivision is intended to be consistent with and
does not supersede, revise, repeal or otherwise modify articles
eleven, twelve or twenty-six of this chapter and does not revise,
repeal or otherwise modify the common law doctrine of riparian
rights in West Virginia law.

(g) The secretary shall mail a copy of the permit as issued or
a copy of the order denying a permit to any person who submitted
comments to the director concerning the permit and requested a
copy.

(h) Upon the issuance of any permit pursuant to the provisions
of this article, the secretary shall transmit a copy of such permit
to the office of the assessor for the county in which the well is
located.

(a) It is unlawful for any person to place, construct,
enlarge, alter, repair, remove or abandon any freshwater
impoundment or flowback recycle impoundment with capacity of
greater than 210,000 gallons used in association with any
horizontal well operation until he or she has first secured from
the secretary a certificate of approval for the same: Provided,
That routine repairs that do not affect the safety of the
impoundment are not subject to the application and approval
requirements. A separate application for a certificate of approval
must be submitted by a person for each impoundment he or she
desires to place, construct, enlarge, alter, repair, remove or
abandon, but one application may be valid for more than one
impoundment involved in a single project.

(b) The application fee for placement, construction,
enlargement, alteration, repair or removal of an impoundment
pursuant to this section is $300, and such fee shall accompany the
application for certificate of approval. Operators holding
certificates of approval shall be assessed an annual registration
fee of $100, which shall be valid for more than one impoundment
involved in a single project.

(c) Any certificate of approval required by this section shall
be issued or denied no later than sixty days from the submission of
an application containing the information required by this section.

(d) The initial term of a certificate of approval issued
pursuant to this section shall be one year. Existing certificates
of approval shall be extended for one year upon receipt of the
annual registration fee, an inspection report, a monitoring and
emergency action plan, and a maintenance plan: Provided, That where
an approved, up-to-date inspection report, monitoring and emergency
action plan, and maintenance plan are on file with the department,
and where no outstanding violation(s) of the requirements of the
certificate of approval or any plan submitted pursuant to this
article related to the impoundment exist, then the certificate of
approval shall be extended without resubmission of the foregoing
documents upon receipt of the annual registration fee.

(e) Every application for a certificate of approval shall be
made in writing on a form prescribed by the secretary and shall be
signed and verified by the applicant. The application shall include
a monitoring and emergency action plan and a maintenance plan, the
required contents of which shall be established by the secretary by
legislative rule. The application shall contain and provide
information that may reasonably be required by the secretary to
administer the provisions of this article.

(f) Plans and specifications for the placement, construction,
erosion and sediment control, enlargement, alteration, repair or
removal and reclamation of impoundments shall be the charge of a
registered professional engineer licensed to practice in West
Virginia. Any plans or specifications submitted to the department
shall bear the seal of a registered professional engineer.
Provided, That when a flowback recycle impoundment will be used to
store flowback water, the impoundment shall be designed and
constructed using a single liner system.

(g) Each certificate of approval issued by the secretary
pursuant to the provisions of this article may contain other terms
and conditions as the secretary may prescribe.

(h) The secretary may revoke or suspend any certificate of
approval whenever the secretary determines that the impoundment for
which the certificate was issued constitutes an imminent danger to
human life or property. If necessary to safeguard human life or
property, the secretary may also amend the terms and conditions of
any certificate by issuing a new certificate containing the revised
terms and conditions.

(1) Before any certificate of approval is amended, suspended,
or revoked by the secretary without the consent of the operator
holding the certificate, the secretary shall hold a hearing in
accordance with the provisions of article five, chapter twenty-nine-a of this code.

(2) Any person adversely affected by an order entered
following this hearing has the right to appeal to the Environmental
Quality Board pursuant to the provisions of article one, chapter
twenty-two-b of this code.

(i) Upon expiration of the certificate of approval, or upon
its revocation by the secretary, the operator shall, within 60
days, fill all impoundments that are not required or allowed by
state or federal law or rule or agreement between the operator and
the surface owner that allows the impoundment to remain open for
the use and benefit of the surface owner and reclaim the site with
the approved erosion and sediment control plan.

(j) This section shall not apply to:

(A) Farm ponds constructed by the operator with the written
consent of the surface owner, which will be used after completion
of the drilling activity primarily for agricultural purposes,
including without limitation livestock watering, irrigation,
retention of animal wastes and fish culture. Any impoundment that
is intended to be left permanent as a farm pond under this
subdivision shall meet the requirements set forth by the United
States Department of Agriculture’s Natural Resources Conservation
Service “Conservation Practice Standard - Ponds” (Code 378).

(B) Farm ponds subject to certificates of approval under
article fourteen of this chapter.

(k) The secretary is authorized to propose rules for
legislative approval in accordance with the provisions of article
three, chapter twenty-nine-a of this code, necessary to effectuate
the provisions of this section.

§22-6A-10. Notice to property owners.

(a) Prior to filing a permit application, the operator shall
provide notice to the surface owner of at least seventy-two hours
but no more than forty-five days prior to entering the surface
tract to conduct any plat surveys required pursuant to this
article.

(b) No later than the filing date of the application, the
applicant for a permit for any well work or for a certificate of
approval for the construction of an impoundment as required by this
article shall deliver, by personal service or by registered mail or
by any method of delivery that requires a receipt or signature
confirmation, copies of the application, well plat, and erosion and
sediment control plan required by section seven of this article to
each of the following persons:

(1) The owners of record of the surface of the tract on which
the well is or is proposed to be located;

(2) The owners of record of the surface tract or tracts
overlying the oil and gas leasehold being developed by the proposed
well work, if such surface tract is to be utilized for roads or
other land disturbance as described in the erosion and sediment
control plan submitted pursuant to subsection (c), section seven of
this article;

(3) The coal owner, operator or lessee, in the event the tract
of land on which the well proposed to be drilled is located is
known to be underlain by one or more coal seams;

(4) The owners of record of the surface tract or tracts
overlying the oil and gas leasehold being developed by the proposed
well work, if such surface tract is to be utilized for the
placement, construction, enlargement, alteration, repair, removal
or abandonment of any impoundment as described in section nine of
this article; and

(5) The operator of any storage field within which the
proposed well work activity is to take place.

(c) If more than three tenants in common or other co-owners of
interests described in subsection (b) of this section hold
interests in such lands, the applicant may serve the documents
required upon the person described in the records of the sheriff
required to be maintained pursuant to section eight, article one,
chapter eleven-a of this code, or publish in the county in which
the well is located or is proposed to be located a Class II legal
advertisement as described in section two, article three, chapter
fifty-nine of this code, containing such notice and information as
the secretary shall prescribe by rule, with the first publication
date being at least ten days prior to the filing of the permit
application: Provided, That all owners occupying the tracts where
the well work is or is proposed to be located on the filing date of
the permit application shall receive actual service of the
documents required by subsection (b) of this section.

(d) Materials served upon persons described in subsections (b)
and (c) of this section shall contain a statement of the methods
and time limits for filing comments, who may file comments, the
name and address of the secretary for the purpose of filing
comments and obtaining additional information, and a statement that
such persons may request, at the time of submitting comments,
notice of the permit decision and a list of persons qualified to
test water as provided by the Office of Oil and Gas.

(e) Any person entitled to submit comments shall also be
entitled to receive from the secretary a copy of the permit as
issued or a copy of the order modifying or denying the permit if
such person requests receipt of them as a part of the comments
concerning the permit application.

(f) The surface owners described in subdivisions (1), (2) and
(4), subsection (b) of this section, and the coal owner, operator
or lessee described in subdivision (3) of said subsection shall
also be entitled to receive notice within seven days but no less
than two days before commencement that well work or site
preparation work that involves any disturbance of land is expected
to commence.

(g) Persons entitled to notice may contact the department to
ascertain the names and locations of water testing laboratories in
the subject area capable and qualified to test water supplies in
accordance with standard accepted methods. In compiling that list
of names the department shall consult with the state Bureau of
Public Health and local health departments.

(h)(1) Prior to conducting any seismic activity for seismic
exploration for natural gas to be extracted using horizontal
drilling methods, the company or person performing the activity
must provide notice to Miss Utility of West Virginia Inc. and to
all surface owners, mineral owners, and storage field operators on
whose property blasting, percussion or other seismic-related
activities will occur or whose property interests are within the
geographic area encompassed by the seismic study.

(2) The notice shall be provided at least three days prior to
commencement of the seismic activity.

(3) The notice shall also include a reclamation plan in
accordance with the erosion and sediment control manual that
provides for the reclamation of any areas disturbed as a result of
the seismic activity, including filling of shotholes utilized for
blasting.

(4) Nothing in this subdivision shall be construed to decide
questions as to whether seismic activity may be secured by mineral
owners, surface owners or other ownership interests.

§22-6A-11.Plugging and abandonment of horizontal wells.

The secretary shall promulgate legislative rules governing the
procedures for plugging horizontal wells, including rules relating
to the methods of plugging such wells and the notices required to
be provided in connection therewith.

§22-6A-12. Reclamation requirements.

The operator of a horizontal well shall reclaim the land
surface within the area disturbed in siting, drilling, completing
or producing the well in accordance with the following
requirements:

(a) Except as provided elsewhere in this section, within six
months after the completion of the drilling process the operator
shall fill all the pits and impoundments that are not required or
allowed by state or federal law or rule or agreement between the
operator and the surface owner that allows the impoundment to
remain open for the use and benefit of the surface owner (i.e. a
farm pond as described in section nine of this article) and remove
all concrete bases, drilling supplies, and drilling equipment.
Within that period, the operator shall grade or terrace and plant,
seed or sod the area disturbed that is not required in production
of the horizontal well where necessary to bind the soil and prevent
substantial erosion and sedimentation. No pit may be used for the
ultimate disposal of salt water. Salt water and oil shall be
periodically drained or removed and properly disposed of from any
pit that is retained so the pit is kept reasonably free of salt
water and oil. No pits may be left permanent.

(b) For well pads containing multiple horizontal wells,
reclamation shall be completed within six months after the
completion of the drilling process for a well, unless the operator
commences drilling on a subsequent well at that location within
that six-month period.

(c) Within six months after a horizontal well that has
produced oil or gas is plugged or after the plugging of a dry hole,
the operator shall remove all production and storage structures,
supplies and equipment and any oil, salt water and debris and fill
any remaining excavations. Within that period, the operator shall
grade or terrace and plant, seed or sod the area disturbed where
necessary to bind the soil and prevent substantial erosion and
sedimentation.

(d)(1) It shall be the duty of the operator to commence the
reclamation of the area of land disturbed in siting, drilling,
completing or producing the horizontal well in accordance with soil
erosion and sediment control plans approved by the secretary or the
secretary’s designee pursuant to this article.

(2) The secretary, upon written application by an operator
showing reasonable cause, may extend the period within which
reclamation shall be completed, but not to exceed a further six-month period.

(3) If the secretary refuses to approve a request for
extension, the refusal shall be by order, which may be appealed
pursuant to the provisions of subsection (w), section five of this
article.

§22-6A-13. Performance bonds; corporate surety or other security.

(a) No permit shall be issued pursuant to this article unless
a bond as described in subsection (d) of this section which is
required for a particular activity by this article is or has been
furnished as provided in this section.

(b) A separate bond as described in subsection (d) of this
section may be furnished for each horizontal well drilled. Each of
these bonds shall be in the sum of $5,000 payable to the State of
West Virginia, conditioned on full compliance with all laws, rules
relating to the drilling, redrilling, deepening, casing, and
stimulating of horizontal wells and to the plugging, abandonment,
and reclamation of horizontal wells and for furnishing such reports
and information as may be required by the secretary.

(c) When an operator makes or has made application for permits
to drill or stimulate a number of horizontal wells, the operator
may, in lieu of furnishing a separate bond, furnish a blanket bond
in the sum of $50,000 payable to the State of West Virginia, and
conditioned as aforesaid in subsection (b) of this section.

(d) The form of the bond required by this article shall be
approved by the secretary and may include, at the option of the
operator, surety bonding, collateral bonding (including cash and
securities) letters of credit, establishment of an escrow account,
self-bonding or a combination of these methods. If collateral
bonding is used, the operator may elect to deposit cash, or
collateral securities or certificates as follows: Bonds of the
United States or its possessions, of the federal land bank, or of
the homeowners' loan corporation; full faith and credit general
obligation bonds of the State of West Virginia or other states or
of any county, district or municipality of the State of West
Virginia or other states; or certificates of deposit in a bank in
this state, which certificates shall be in favor of the department.
The cash deposit or market value of the securities or certificates
shall be equal to or greater than the amount of the bond. The
secretary shall, upon receipt of any deposit of cash, securities or
certificates, promptly place the same with the Treasurer of the
State of West Virginia whose duty it shall be to receive and hold
the same in the name of the state in trust for the purpose of which
the deposit is made when the permit is issued. The operator shall
be entitled to all interest and income earned on the collateral
securities filed by such operator. The operator making the deposit
shall be entitled from time to time to receive from the State
Treasurer, upon the written approval of the secretary, the whole or
any portion of any cash, securities or certificates so deposited,
upon depositing with the State Treasurer in lieu thereof, cash or
other securities or certificates of the classes herein specified
having value equal to or greater than the amount of the bond.

(e) When an operator has furnished a separate bond from a
corporate bonding or surety company to drill, fracture or stimulate
a horizontal well and the well produces oil or gas or both, its
operator may deposit with the secretary cash from the sale of the
oil or gas or both until the total deposited is $5,000. When the
sum of the cash deposited is $5,000, the separate bond for the well
shall be released by the secretary. Upon receipt of that cash, the
secretary shall immediately deliver that amount to the Treasurer of
the State of West Virginia. The State Treasurer shall hold the cash
in the name of the state in trust for the purpose for which the
bond was furnished and the deposit was made. The operator shall be
entitled to all interest and income which may be earned on the cash
deposited so long as the operator is in full compliance with all
laws and rules relating to the drilling, redrilling, deepening,
casing, plugging, abandonment, and reclamation of the well for
which the cash was deposited and so long as the operator has
furnished all reports and information as may be required by the
secretary. If the cash realized from the sale of oil or gas or both
from the well is not sufficient for the operator to deposit with
the secretary the sum of $10,000 within one year of the day the
well started producing, the corporate or surety company which
issued the bond on the well may notify the operator and the
secretary of its intent to terminate its liability under its bond.
The operator then shall have thirty days to furnish a new bond from
a corporate bonding or surety company or collateral securities or
other forms of security, as provided in this section with the
secretary. If a new bond or collateral securities or other forms of
security are furnished by the operator, the liability of the
corporate bonding or surety company under the original bond shall
terminate as to any acts and operations of the operator occurring
after the effective date of the new bond or the date the collateral
securities or other forms of security are accepted by the Treasurer
of the State of West Virginia. If the operator does not furnish a
new bond or collateral securities or other forms of security with
the secretary, as provided in this section, the operator shall
immediately plug, fill and reclaim the well in accordance with all
of the provisions of law and rules applicable thereto. In such
case, the corporate or surety company which issued the original
bond shall be liable for any plugging, filling or reclamation not
performed in accordance with such laws and rules.

(f) Any separate bond furnished for a particular well prior to
the effective date of this article shall continue to be valid for
all work on the well permitted prior to the effective date of this
article; but no permit shall hereafter be issued on such a
particular well without a bond complying with the provisions of
this section. Any blanket bond furnished prior to the effective
date of this article shall be replaced with a new blanket bond
conforming to the requirements of this section, at which time the
prior bond shall be discharged by operation of law; and if the
secretary determines that any operator has not furnished a new
blanket bond, the secretary shall notify the operator by registered
mail or by any method of delivery that requires a receipt or
signature confirmation of the requirement for a new blanket bond,
and failure to submit a new blanket bond within sixty days after
receipt of the notice from the secretary shall work a forfeiture
under subsection (i) of this section of the blanket bond furnished
prior to the effective date of this article.

(g) Any such bond shall remain in force until released by the
secretary, and the secretary shall release the same upon
satisfaction that the conditions thereof have been fully performed.
Upon the release of any such bond, any cash or collateral
securities deposited shall be returned by the secretary to the
operator who deposited it.

(h) Whenever the right to operate a well is assigned or
otherwise transferred, the assignor or transferor shall notify the
department of the name and address of the assignee or transferee by
registered mail or by any method of delivery that requires a
receipt or signature confirmation not later than thirty days after
the date of the assignment or transfer. No assignment or transfer
by the owner shall relieve the assignor or transferor of the
obligations and liabilities unless and until the assignee or
transferee files with the department the well name and the permit
number of the subject well, the county and district in which the
subject well is located, the names and addresses of the assignor or
transferor, and assignee or transferee, a copy of the instrument of
assignment or transfer accompanied by the applicable bond, cash,
collateral security or other forms of security, described in this
section, and the name and address of the assignee's or transferee's
designated agent if assignee or transferee would be required to
designate such an agent under this article, if assignee or
transferee were an applicant for a permit under this article.
Every well operator required to designate an agent under this
section shall, within five days after the termination of such
designation, notify the department of such termination and
designate a new agent.

Upon compliance with the requirements of this section by
assignor or transferor and assignee or transferee, the secretary
shall release assignor or transferor from all duties and
requirements of this article and shall give written notice of
release to assignor or transferor of any bond and return to
assignor or transferor any cash or collateral securities deposited
pursuant to this section.

(i) If any of the requirements of this article or rules
promulgated pursuant thereto or the orders of the secretary has not
been complied with within the time limit set by any notice of
violation issued pursuant to this article, the performance bond
shall then be forfeited.

(j) When any bond is forfeited pursuant to the provisions of
this article or rules promulgated pursuant thereto, the secretary
shall collect the forfeiture without delay.

(k) All forfeitures shall be deposited in the Treasury of the
State of West Virginia in the Oil and Gas Reclamation Fund as
defined in section twenty-nine, article six of this chapter.

§22-6A-14. Civil action for contamination or deprivation of fresh
water source or supply; presumption.

(a) Nothing in this article affects in any way the rights of
any person to enforce or protect, under applicable law, the
person's interest in water resources affected by an oil or gas
operation.

(b) Unless rebutted by one of the defenses established in
subsection (c) below, in any action for contamination or
deprivation of a fresh water source or supply within one thousand
feet of the site of drilling for a horizontal well, there shall be
a rebuttable presumption that the drilling and the well or either,
was the proximate cause of the contamination or deprivation of the
fresh water source or supply.

(c) In order to rebut the presumption of liability established
in subsection (b) of this section, the operator must affirmatively
prove one of the following defenses:

(1) The pollution existed prior to the drilling or alteration
activity as determined by a pre-drilling or pre-alteration survey.

(2) The landowner or water purveyor refused to allow the
operator access to the property to conduct a pre-drilling or pre-alteration survey.

(3) The water supply is not within one thousand feet of the
well.

(4) The pollution occurred more than six months after
completion of drilling or alteration activities.

(5) The pollution occurred as the result of some cause other
than the drilling or alteration activity.

§22-6A-15. Offenses; civil and criminal penalties.

(a) Any person or persons, firm, partnership, partnership
association or corporation who willfully violates any provision of
this article or any rule or order promulgated hereunder shall be
subject to a civil penalty not exceeding $5,000. Each day a
violation continues after notice by the department constitutes a
separate offense. The penalty shall be recovered by a civil action
brought by the department, in the name of the state, before the
circuit court of the county in which the subject well or facility
is located. All such civil penalties collected shall be credited to
the general fund of the state.

(b) Notwithstanding the provisions of subsection (a) of this
section, any person or persons, firm, partnership, partnership
association or corporation who willfully disposes of waste fluids,
drill cuttings or any other liquid substance generated in the
development of a horizontal well and which could impact surface or
groundwater, in violation of this article or any rule or order
promulgated hereunder or in violation of any other state or federal
statutes, rules or regulations, shall be subject to a civil penalty
not exceeding $100,000. The penalty shall be recovered by a civil
action brought by the department, in the name of the state, before
the circuit court of the county in which the subject well or
facility is located. All such civil penalties collected shall be
credited to the general fund of the state.

(c) Any person or persons, firm, partnership, partnership
association or corporation willfully violating any of the
provisions of this article which prescribe the manner of drilling
and casing or plugging and filling any well, or which prescribe the
methods of conserving gas from waste, shall be guilty of a
misdemeanor, and, upon conviction thereof, shall be punished by a
fine not exceeding $5,000, or imprisonment in a regional jail for
not more than 12 months, or both, in the discretion of the court,
and prosecutions under this section may be brought in the name of
the state of West Virginia in the court exercising criminal
jurisdiction in the county in which the violation of such
provisions of the article or terms of such order was committed.

(d) Any person who intentionally misrepresents any material
fact in an application, record, report plan or other document filed
or required to be maintained under the provisions of this article
or any rules promulgated by the secretary thereunder is guilty of
a misdemeanor and, upon conviction thereof, shall be fined not less
than $1,000 nor more than $10,000, or imprisoned in a county or
regional jail not more than six months, or both fined and
imprisoned.

(e) Any person who willfully violates any provision of any
permit issued under or subject to the provisions of this article or
who willfully violates any provision of this article or any rule of
the secretary or any order of the secretary or board is guilty of
a misdemeanor and, upon conviction thereof, shall be fined not less
than $2,500 dollars nor more than $25,000 per day of violation, or
imprisoned in a county or regional jail not more than one year, or
both fined and imprisoned.

§22-6A-16. Local ordinances.

All local ordinances and enactments purporting to regulate gas
operations regulated by this act are hereby preempted and
superseded to the extent the ordinances and enactments regulate the
method of gas operations. Nothing in this act shall affect the
traditional power of local government to regulate zoning and land
development of gas activities as well as other aspects, such as the
time and the place of operations to protect the health, safety and
welfare of the general public through local ordinances and
enactments.

§22-6A-17. Division of Highways approval of well road access.

As part of the permit application, the operator shall provide
a letter of certification from the Division of Highways that the
operator has entered into a required Division of Highways road
maintenance agreement for horizontal drilling operations and is in
compliance with all laws, regulations and conditions required by
the Division of Highways relating to use, maintenance and repair of
all state and county roads to be utilized for access to a well
location, including, but not limited to, those roads used for the
transportation of water, machinery or any other items or materials
related to the construction and operation of the well. The
operator shall be responsible and liable for all actions of the
operator’s agents, employees, subcontractors and others under the
direction of the operator regarding performance under the agreement
provided herein above. Upon notice that the operator is failing to
comply with the letter of certification as required by this
section, the division shall deem such violation as a violation of
a permit condition for construction or operation of the well
pursuant to this article.

Unless the context in which used clearly requires a different
meaning, as used in this article:

(1) “Board” means the shallow gas well review board provided
for in section four of this article;

(2) “Chair” means the chair of the shallow gas well review
board provided for in section four of this article;

(3) “Coal operator” means any person who proposes to or does
operate a coal mine;

(4) “Coal seam” and “workable coal bed” are interchangeable
terms and mean any seam of coal twenty inches or more in thickness,
unless a seam of less thickness is being commercially worked, or
can in the judgment of the division foreseeably be commercially
worked and will require protection if wells are drilled through it;

(5) “Commission” means the Oil and Gas Conservation Commission
provided for in section four, article nine of this chapter;

(6) “Commissioner” means the Oil and Gas Conservation
Commissioner provided for in section four, article nine of this
chapter;

(7) “Correlative rights” means the reasonable opportunity of
each person entitled thereto to recover and receive without waste
the gas in and under a tract or tracts, or the equivalent thereof;

(8) “Deep well” means any well other than a shallow well or
coalbed methane well, drilled and completed into a formation at or
below the top of the uppermost member of the “Onondaga Group”;

(9) “Division” means the state Division of Environmental
Protection provided for in chapter twenty-two of this code;

(10) “Director” means the Director of the Division of
Environmental Protection as established in article one, chapter
twenty-two of this code or such other person to whom the division
department delegates authority or duties pursuant to sections six
or eight, article one, chapter twenty-two of this code;

(11) “Drilling unit” means the acreage on which the board
decides one well may be drilled under section ten of this article;

(12) “Gas” means all natural gas and all other fluid
hydrocarbons not defined as oil in subdivision (15) of this
section;

(13) “Gas operator” means any person who owns or has the right
to develop, operate and produce gas from a pool and to appropriate
the gas produced therefrom either for such person or for such
person and others. In the event that there is no gas lease in
existence with respect to the tract in question, the person who
owns or has the gas rights therein shall be considered a “gas
operator” to the extent of seven-eights of the gas in that portion
of the pool underlying the tract owned by such person, and a
“royalty owner” to the extent of one-eighth of such gas;

(14) “Just and equitable share of production” means, as to
each person, an amount of gas in the same proportion to the total
gas production from a well as that person’s acreage bears to the
total acreage in the drilling unit;

(15) “Oil” means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoir;

(16) “Owner” when used with reference to any coal seam, shall
include any person or persons who own, lease or operate such coal
seam;

(17) “Person” means any natural person, corporation, firm,
partnership, partnership association, venture, receiver, trustee,
executor, administrator, guardian, fiduciary or other
representative of any kind, and includes any government or any
political subdivision or any agency thereof;

(18) “Plat” means a map, drawing or print showing the location
of one or more wells or a drilling unit;

(19) “Pool” means an underground accumulation of gas in a
single and separate natural reservoir (ordinarily a porous
sandstone or limestone). It is characterized by a single
natural-pressure system so that production of gas from one part of
the pool tends to or does affect the reservoir pressure throughout
its extent. A pool is bounded by geologic barriers in all
directions, such as geologic structural conditions, impermeable
strata, and water in the formation, so that it is effectively
separated from any other pools which may be present in the same
district or in the same geologic structure;

(20) “Royalty owner” means any owner of gas in place, or gas
rights, to the extent that such owner is not a gas operator as
defined in subdivision (13) of this section;

(21) “Shallow well” means any gas well other than a coalbed
methane well, drilled no deeper than one hundred feet below the top
of the “Onondaga Group”:and completed in a formation above the top
of the uppermost member of the “Onondaga Group:”Provided, That in
drilling a shallow well the well operator may penetrate into the
“Onondaga Group” to a reasonable depth, not in excess of twenty
feet, in order to allow for logging and completion operations, but
in no event may the “Onondaga Group” formation or any formation
below the “Onondaga Group” be otherwise produced, perforated or
stimulated in any manner;

(22) “Tracts comprising a drilling unit” means that all
separately owned tracts or portions thereof which are included
within the boundary of a drilling unit;

(23) “Well” means any shaft or hole sunk, drilled, bored or
dug into the earth or into underground strata for the extraction,
injection or placement of any liquid or gas, or any shaft or hole
sunk or used in conjunction with such extraction, injection or
placement. The term “well” does not include any shaft or hole sunk,
drilled, bored or dug into the earth for the sole purpose of core
drilling or pumping or extracting therefrom potable, fresh or
usable water for household, domestic, industrial, agricultural or
public use; and

(24) “Well operator” means any person who proposes to or does
locate, drill, operate or abandon any well.

ARTICLE 9. OIL AND GAS CONSERVATION.

§22C-9-2. Definitions.

(a) Unless the context in which used clearly requires a
different meaning, as used in this article:

(1) “Commission” means Oil and Gas Conservation Commission and
“commissioner” means the oil and gas conservation commissioner as
provided for in section four of this article;

(2) “Director” means the Director of the Division of
Environmental Protection and “chief” means the chief of the Office
of Oil and Gas;

(3) “Person” means any natural person, corporation,
partnership, receiver, trustee, executor, administrator, guardian,
fiduciary or other representative of any kind, and includes any
government or any political subdivision or any agency thereof;

(4) “Operator” means any owner of the right to develop,
operate and produce oil and gas from a pool and to appropriate the
oil and gas produced therefrom, either for such person or for such
person and others; in the event that there is no oil and gas lease
in existence with respect to the tract in question, the owner of
the oil and gas rights therein shall be considered as “operator” to
the extent of seven-eighths of the oil and gas in that portion of
the pool underlying the tract owned by such owner, and as “royalty
owner’ as to one-eighth interest in such oil and gas; and in the
event the oil is owned separately from the gas, the owner of the
substance being produced or sought to be produced from the pool
shall be considered as “operator” as to such pool;

(5) “Royalty owner” means any owner of oil and gas in place,
or oil and gas rights, to the extent that such owner is not an
operator as defined in subdivision (4) of this section;

(6) “Independent producer” means a producer of crude oil or
natural gas whose allowance for depletion is determined under
Section 613A of the federal Internal Revenue Code in effect on July
1, 1997;

(7) “Oil” means natural crude oil or petroleum and other
hydrocarbons, regardless of gravity, which are produced at the well
in liquid form by ordinary production methods and which are not the
result of condensation of gas after it leaves the underground
reservoir;

(8) “Gas” means all natural gas and all other fluid
hydrocarbons not defined as oil in subdivision (7) of this section;

(9) “Pool” means an underground accumulation of petroleum or
gas in a single and separate reservoir (ordinarily a porous
sandstone or limestone). It is characterized by a single
natural-pressure system so that production of petroleum or gas from
one part of the pool affects the reservoir pressure throughout its
extent. A pool is bounded by geologic barriers in all directions,
such as geologic structural conditions, impermeable strata, and
water in the formations, so that it is effectively separated from
any other pools that may be presented in the same district or on
the same geologic structure;

(10) “Well” means any shaft or hole sunk, drilled, bored or
dug into the earth or underground strata for the extraction of oil
or gas;

(11) “Shallow well” means any well other than a coalbed
methane well, drilled no deeper than one hundred feet below the top
of the “Onondaga Group”:and completed in a formation above the top
of the uppermost member of the “Onondaga Group:”Provided, That in
drilling a shallow well the operator may penetrate into the
“Onondaga Group” to a reasonable depth, not in excess of twenty
feet, in order to allow for logging and completion operations, but
in no event may the “Onondaga Group” formation or any formation
below the “Onondaga Group” be otherwise produced, perforated or
stimulated in any manner;

(12) “Deep well” means any well, other than a shallow well or
coalbed methane well, drilled and completed into a formation at or
below the top of the uppermost member of the “Onondaga Group;”

(13) “Drilling unit” means the acreage on which one well may
be drilled;

(14) “Waste” means and includes:

(A) Physical waste, as that term is generally understood in
the oil and gas industry;

(B) The locating, drilling, equipping, operating or producing
of any oil or gas well in a manner that causes, or tends to cause,
a reduction in the quantity of oil or gas ultimately recoverable
from a pool under prudent and proper operations, or that causes or
tends to cause unnecessary or excessive surface loss of oil or gas;
or

(C) The drilling of more deep wells than are reasonably
required to recover efficiently and economically the maximum amount
of oil and gas from a pool. Waste does not include gas vented or
released from any mine areas as defined in section two, article
one, chapter twenty-two-a of this code or from adjacent coal seams
which are the subject of a current permit issued under article two
of chapter twenty-two-a of this code: Provided, That nothing in
this exclusion is intended to address ownership of the gas;

(15) “Correlative rights” means the reasonable opportunity of
each person entitled thereto to recover and receive without waste
the oil and gas in and under his tract or tracts, or the equivalent
thereof; and

(16) “Just and equitable share of production” means, as to
each person, an amount of oil or gas or both substantially equal to
the amount of recoverable oil and gas in that part of a pool
underlying such person’s tract or tracts.

(b) Unless the context clearly indicates otherwise, the use of
the word “and” and the word “or” shall be interchangeable, as, for
example, “oil and gas” shall mean oil or gas or both.